H&R Block(US:HRB)2025-11-06 21:54Financial Performance - The net loss for the three months ended September 30, 2025, was $165,819, compared to a net loss of $172,576 for the same period in 2024, indicating an improvement of about 3.9%[13] - Total revenues for the three months ended September 30, 2025, were $203.6 million, an increase of 5.3% compared to $193.8 million for the same period in 2024[22] - The segment net income from continuing operations for Q1 FY2026 was a loss of $165,368,000, compared to a loss of $171,421,000 in Q1 FY2025, showing an improvement of 3.1%[68] - Total operating expenses decreased to $410,582,000 in Q1 FY2026 from $422,141,000 in Q1 FY2025, a reduction of 2.8%[68] - The company incurred a loss from continuing operations before income taxes of $216,331,000 for Q1 FY2026, compared to a loss of $232,261,000 in Q1 FY2025[68] Assets and Liabilities - As of September 30, 2025, total assets decreased to $2,621,322, down from $3,263,898 as of June 30, 2025, representing a decline of approximately 19.6%[11] - Total current liabilities decreased to $739,551 as of September 30, 2025, from $1,298,610 as of June 30, 2025, a decrease of about 43.1%[11] - The company’s long-term debt increased to $1,734,962 as of September 30, 2025, from $1,143,305 as of June 30, 2025, an increase of approximately 51.7%[11] - The company’s retained earnings (deficit) stood at $(609,299,000) as of September 30, 2025, compared to $12,061,000 as of June 30, 2025[11] - The company had an outstanding balance of $245.0 million under its 2025 committed line of credit as of September 30, 2025[44] Cash Flow - Cash and cash equivalents decreased significantly to $376,410 as of September 30, 2025, from $983,277 as of June 30, 2025, a reduction of approximately 61.7%[11] - The company reported cash used in operating activities of $356,838 for the three months ended September 30, 2025, compared to $328,581 for the same period in 2024, reflecting an increase of approximately 8.6%[13] - The company declared cash dividends of $0.42 per share, totaling $54,343 for the quarter[14] Revenue Streams - U.S. assisted tax preparation revenues rose to $48.6 million, up 13.1% from $43.0 million in the prior year[22] - Assisted tax preparation revenue increased to $48.644 million in Q1 FY2026 from $42.963 million in Q1 FY2025, representing a growth of 12.4%[68] Deferred Revenue and Liabilities - As of September 30, 2025, deferred revenue related to the Peace of Mind® Extended Service Plan was $123.9 million, with $83.7 million expected to be recognized over the next twelve months[22] - The company expects to recognize all deferred revenue related to Tax Identity Shield® by April 2026, with a balance of $18.7 million as of September 30, 2025[23] - Liabilities related to the 100% accuracy guarantee were $10.4 million as of September 30, 2025, down from $11.4 million as of June 30, 2025[48] - Estimated contingent consideration liabilities related to acquisitions were $30.6 million as of September 30, 2025, compared to $29.6 million as of June 30, 2025[49] Stock and Compensation - The company granted 0.8 million shares under stock-based compensation plans during the three months ended September 30, 2025, with an expense of $6.2 million[27] - Stock-based compensation expense for Q1 FY2026 was $6.2 million, down from $8.7 million in Q1 FY2025[27] Other Financial Metrics - The effective tax rate for continuing operations was 23.6% for the three months ended September 30, 2025, down from 26.2% in the same period of 2024[46] - The allowance for credit losses for Emerald Advance® as of September 30, 2025, was $19.7 million, unchanged from the previous quarter[34] - The company made payments to acquire businesses totaling $5.1 million during the three months ended September 30, 2025, compared to $5.9 million in the same period of 2024[37]